GENERAL FUND RECEIPT (GFR) ACCOUNT GUIDE: SCENARIO 3: NON-CUSTODIAL STATEMENT COLLECTIONS: COLLECTION OF EXCHANGE REVENUE WITH RELATED COSTS

Effective Fiscal 2021

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**GENERAL FUND RECEIPT ACCOUNT (GFR) SCENARIO 3: NON-CUSTODIAL STATEMENT COLLECTIONS: COLLECTION OF EXCHANGE REVENUE WITH RELATED COSTS**

**EFFECTIVE FISCAL YEAR 2021**

**PREPARED BY:**

**GENERAL LEDGER AND ADVISORY BRANCH**

**FISCAL ACCOUNTING OPERATIONS**

**BUREAU OF THE FISCAL SERVICE**

**U.S. DEPARTMENT OF THE TREASURY**

## **Background**

## **Definition of a General Fund Receipt (GFR) Account**

The Government Accountability Office (GAO) defines a GFR Account as: “A receipt account credited with all collections that are not earmarked by law for another account for a specific purpose.  These collections are presented in the President’s budget as either governmental (budget) receipts or offsetting receipts.  These include taxes, customs duties, and miscellaneous receipts.”**(Government Accountability Office, A Glossary of Terms Used in the Federal Budget Process, September 2005, GAO–05-734SP)

## **Purpose**

This guidance proposes accounting and reporting guidance for Non-Custodial Statement Collections: Collection of Exchange Revenue with Related Costs in GFR accounts.  The focus of this guidance is on the GFR account activity.  

## **Federal Account Symbols (FAS), Treasury Account Symbols (TAS), and Collections**

The Federal Account Symbols and Titles (FAST) Book, published by Treasury, lists all FAS available for Federal agency use.  A collection can be classified to any of the listed accounts.  To classify a receipt, append your agency’s two digit department code to the FAS.  This combination of department code and FAS creates TAS.  For example, collections for work performed in accordance with Economy Act can be deposited into any type of expenditure account.  On the other hand, National Park Service fees are designated by law to be deposited to a special fund receipt account.  Similarly, collections for the National Endowment for the Arts Gift Fund are designated by law to be deposited to a trust fund receipt account.  Amounts collected in the course of business by the U.S. Postal Service are, by law, deposited to a revolving fund.  Amounts not belonging to the Government are, by law, classified to deposit fund accounts.  As you can see, a specific law determines how the collections in the preceding examples are classified in a TAS.

Absent specific legislation, collections should be classified to a **General Fund Receipt TAS**.  Title 31, United States Code (USC), chapter 33, section 3302(b) establishes this concept by stating: “Except as provided in section 3718 (b) of this title, an official or agent of the Government receiving money for the Government from any source shall deposit the money in the Treasury as soon as practicable without deduction for any change or claim.”  Also, Title 31, USC, chapter 33, section 3302(e) states that “an official or agent of the Government having custody or possession of public money shall keep an accurate entry of each amount of public money received, transferred, and paid.”

## **GFR Account Categories in the FAST Book**

The “Types of Collections and Relevant FASAB References” column was included in the table to assist users in providing background information.  The users should note that the types of collections and limited paragraph references listed on the chart are suggestions and they should not be solely relied on.  Each entity should perform its own research to determine the appropriate category for its collection.

## **GFR Account Reporting Responsibility**

Within each GFR account category listed in the FAST Book there are unique FAS to identify specific activity.  After selecting the proper TAS, the reporting entity should append its 3-digit agency identifier code to the beginning of the TAS for classifying the receipt to Treasury.  A collecting entity typically reports all GFR TAS beginning with its 3-digit agency identifier code within its entity financial statements.

**Exchange Revenue**

The collection of exchange revenue is generally reported on the Statement of Net Cost but under exceptional circumstances, an entity may recognize virtually no costs (either during the current period or during past periods) in connection with earning revenue that it collects.  In such cases:

45.1. The collecting entity should not offset its gross costs by such exchange revenue in determining its net cost of operations. If such exchange revenue is retained by the entity, it should be recognized as a financing source in determining the entity’s operating results. If, instead, such revenue is collected on behalf of other entities (including the U.S. Government as a whole), the entity that collects the revenue should account for that revenue as a custodial activity, i.e., an amount collected for others. 

45.2. If the collecting entity transfers the exchange revenue to other entities, similar recognition by other entities is appropriate.  

a. If the other entities to which the revenue is transferred also recognize virtually no costs in connection with the Government earning the revenue, the amounts transferred to them should not offset their gross cost in determining their net cost of operations but rather should be recognized as a financing source in determining their operating results. 

b. If the other entities to which the revenue is transferred do recognize costs in connection with the Government earning the revenue, the amounts transferred to them should offset their gross cost in determining their net cost of operations.

45.3. Because the revenue is exchange revenue regardless of whether related costs are recognized, it should be recognized and measured under the exchange revenue standards.[footnoteRef:1] [1:  See SFFAS No. 7, paragraph 45.] 

Agencies may request guidance from FASAB if determining the propriety of preparing a Statement of Custodial Activity or if a note disclosure for a given collection is an issue that cannot otherwise be resolved. 

## **FLOWCHART - GFR COLLECTIONS TO COLLECTING AGENCY’S FINANCIAL STATEMENTS**

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No

Yes

Yes

No

No

**Custodial Revenue**

Yes

No

Yes

Yes

Does the collecting agency have costs related to generating the revenue?

Is the custodial

revenue material?

**Agency Revenue**

Statement of Changes in Net Position

Balance Sheet

**Not Revenue**

Balance Sheet

Footnote Disclosure

Statement of Custodial Activity

Balance Sheet

Statement of Net 

Cost

Statement of Changes in Net Position

Is the GFR collection revenue?

Is the GFR collection exchange revenue?

Balance Sheet

Scenarios:

5 – Proceeds from disposition of assets (Transferred-In)

6 – Downward reestimate (Transferred-In)

7 - Seigniorage

Scenarios:

3 – Exchange Revenue

4 – Receivables from Canceled Authority

Scenarios: 1 Nonexchange Revenue

                    2 Nonexchange Revenue

1 & 2 – Non-exchange Revenue

## **Chart - Impact on Collecting Entity’s Financial Statements by Various Types of Collections**

## **Listing of USSGL Accounts Used in This Scenario**

## **Scenario 3: Non-Custodial Statement Collections: Collection of Exchange Revenue with Related Costs**

There are entities that collect exchange revenue with related costs where the collections are not retained by the collecting entity.  In these cases, the entity should record the exchange revenue in its entity financial statements as usual.  However, it should also reflect the disposition of the financing source on the Statement of Changes in Net Position.  The example we have used for exchange revenue with related costs is the passport fees collected by the State Department.  The State Department collects passport fees, which are not retained by the Department but are deposited directly to the General Fund Receipt Account.  The passport fee is retained by the Federal Government and is generally not refundable whether the passport is issued or not.  

**NOTE: Scenario 3 is for agencies who collect exchange revenue with related cost but who have no legal authority to retain/use the collection (hence would submit the collection to the GF), nonetheless they have to report the exchange revenue in their Statement of Net Cost (SNC) not the Statement of Custodial Activity (SCA) to offset the collection cost they incurred.  The General Fund Expenditure TAS has been included to demonstrate this relationship.**

**Year 1 Quarter 1**

Also Post:

**Year 1 – 1st Quarter Preclosing Trial Balance**

**Financial Statements:**

**Year 1 – 4th Quarter**

Also Post:

**Year 1 4th Quarter Preclosing Trial Balance**

**Preclosing Adjusting Entry**

**Year 1 4th Quarter Preclosing Adjusted Trial Balance**

**Financial Statements:**

**Reclassified Financial Statements**

**Closing Entries**

**Post-Closing Trial Balance**

Page 2 of 2August 2020

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